CB - alternative solutions?

[CardyMow]

If cutting CB in the way that has been outlined is unfair, how else could/ should the government save money on this benefit?

I ask this because a columnist in the Daily Fail (I ^know!) said that he would rather they stopped CB for dc at the age of 16yo, regardless of whether they are still in education or not.

I always thought that the reason CB was paid to 19 was because, if, like our family, you are caught in a cycle of very low wages (£16Kfor a FT job), the only way out is more education. If you take away CB for poor people, they will also lose their TC's, and theefore have a dc in FT education that they get NO income for, and are therefore unable to feed or clothe them. It was done because otherwise, these DC would HAVE to go out to work FT, just to have money to eat, thus them also being stuck forever in a very low paid job, with no chance of bettering themselves.

Surely education is the way OUT of the benefits trap? But many more dc will be forced to leave school at 16 to work in min wage jobs if their parents cannot feed them while they gain better qualifications.

It would make any form of further education the preserve of the rich, surely that is a step too far back in time?

While I agree that the way of administering this CB cut needs to be fairer and based on household income rather than one earners tax bracket, surely if minimum wage is £5.85 p/h, then a lot of the country earn barely more than £12,000pa for a FT job, so wherever you are, whatever you are doing, £42K is a HUGE income...Why shouldn't CB be cut for anyone with a household income of £34K pa? My family certainly wouldn't need CB if we had an income of £34Kpa.

How has the minimum wage held down wages? Do you mean that it is set far too low?

Yes, because most companies will only PAY minimum wage, because they CAN. 10 years ago when I was 19, I was earning £7.50/ hr for working in a shop. That was just before they brought in minimum wage. Now, for doing the SAME job, I could only earn £5.85/hr. It is set far too low, and minimum wage itself destroys competition between employers. You used to get TEscos paying more than Sainsbury's for checkout jobs, then vice versa, which pushed up wages in menial jobs. Now all of them just pay min wage.

I think min wage was one of the worst things that labour brought in! While I understand that something needed to be done to protect piece-workers, this was the wrong way to do it, and has just handed larger profits to bosses that can pay staff peanuts. And it'll never get repealed, because businesses will leave the UK in droves if they had to pay all their staff a living wage.

Thus leaving people like us in a situation where DP isn't paid enough to live on without state assisstance.

I can't see the logic in that at all. Sainsbury's can still pay more than Tesco if they want to retain staff. I've heard lots of objections to the minimum wage (from employers of course) but never that it actually forces wages down.

Unless i am incorrect munumum wage was already in place 10 years ago and was £3.70 for the adult rate. Loudlass you were on a fantastic rate for a shop worker then, at 19 years old. Was this in London?

Ah yes, you do have to have somewhere for them to sleep. But you can register your au pair with Ofsted. I'm still investigating the ins and outs myself, but it basically seems to involve sending her on a first aid course and having her CRB checked.

duchesse thanks for the income link (it has taken me time to catch up)

The area that seems to have the most money is the 55+. Make them pay NI if there income is above an agreed level perhaps?

What about stopping benefits for higher rate pensioners (bus passes, fuel allowance)?

I don't mind losing child benefit (our total income is £44k), but it rankles that a pensioner on £100k pension will still get bus pass (worth at least £20 per week), fuel allowance, and so on.

Has anyone else noticed that Ian Duncan-Smith has wriggled out of answering this blatant unfairness many times when interviewed on the radio?

they should tax BTl income properly, ie tax paid on it all prior to the deduction of mortgage interest and no knocking off 10% a year for wear and tear!

Totally agree with BoffinMum Wed 06-Oct-10 13:44:57
"There is a big hole in the policy. It costs money to go to work, and that isn't taken into account in this crude system of means testing.

Let's take the notional higher rate taxpayer on £45k. If you have a couple of young kids in nursery, and live in a rural area or have to commute to London, for example, it is not unusual to spend £20-22,000 a year just covering the costs of getting out of the house. That leaves £650-ish per calendar month out of taxed income to cover housing, food, etc, or around £8000 a year. You won't be entitled to much in the way of other benefits. Therefore you are probably worse off than the person on the minimum wage whose mum is available to offer free childcare on demand, and who works within walking distance of the home. That person might even get housing benefit and council tax contributions, free prescriptions, Child Tax Credit and so on."

This is us. Most of dh's family are the other. They don't get how we can't afford to join them on holiday abroad.

Have no objection to giving up 2.5k per annum in CB if the EY part of childcare (the most costly part) was tax deductible.

It may have been just over 10 years ago, but I was 18/19 when minimum wage was brought in. No my job wasn't in London, but a SE town. If I had stayed in the same job then, my wage would have HALVED from 7.50/hr to £3.70/hr.

Minimum wage do NOT get free childcare on demand. DP Doesn't work within walking distance of home, there ARE no jobs within walking distance. Christ even the schools are not within walking distance. We don't get any help with our council tax. We DO get some help with our rent, but it's less than half the cost of our rent. We don't have family able to offer childcare...my parents are under 50 and both still work, and DP's parents are MUCH older, and infirm and unable to offer childcare.

There are so many variables in peoples lives; when they bought their property (prices low or high), free childcare from grandparents or paid; ex-families on the scene to support or not; which region of the UK you live in; healthy or not; availability of jobs, redundancies; no of children etc....so I agree a low income family can better off than mid-income one in some circumstances and in others low waged families may be really struggling compared to mid-earners.

What is really sickening in all this is that many people seem to have forgotten that we, as a society, owe every member, including children a duty of care. Universal child benefit marks this and demonstrates that children are members of our society and supported as such while they are young and most vulnerable. Whether it is spent on essentials or extras, children benefit from this investment in them at the time they most need it and it has most impact on their development. Most children will repay child benefit many times over in taxes during their working lives and support many of the 'if you can't afford chidren, don't have them' perspective in their dotage.

I can't believe any government is deluded enough to think their conference announcement is fair. By the time we have all finished rowing about it and politicians have come up with a seemingly 'fairer' way of cutting CB, we will all thankfully accept it, having forgotten that our children (not parents!) are losing a universal benefit and in a sly, roundabout way the government achieve their aim without fighting the battle head on!

I am absolutely horrified about the impact of child benefit cuts. Yes, I am just within the Higher Rate Tax bracket, but I am a single mother of a teenager, receiving £9 per week child maintenance, which just covers bus fares to school. I can't believe that if I was married and we both earned just below the HRT then I would still be entitled to child benefit, and could be enjoying a double income. I really don't just want to complain about this, I want to do something active. Can anyone suggest next steps I can take, as I think we should rise up in revolt against this? It is not acceptable. And I didn't vote for them - either of them!

I'd also like to point out that in jobs paid over about £40k you are routinely required to find £1000 up front for work expenses for things, and employers are perpetually surprised when people object to this. I am supposed to act as a free bank for my university, and sometimes it has been two months before I have got my expenses back. Things all have to go on my credit card and it's me who has to find the interest. Another big bill for me is trying to do my email whilst travelling for work. We are required to do this, but there is a rule we can't put data download costs down on expenses forms. So again, I know that every time I have to go to an overseas conference that will mean £30 out of my own pocket simply to do my job (I only have £50 a week left after childcare costs and travel to work). We are not allowed to put in expenses claims that are a round figure either, so sometimes I have had to take a hit retrospectively on those claims too. So this is another example of how complex and scary family finances can be, and why it makes no sense at all to look at headline figures when deciding, and I quote, 'how broad people's shoulders are'.

Pay for a set no of children only, say 2 or 3 if a couple have twins.

I have 2 children because I can afford 2.

And yes this post is aimed at those who have 5, 6, 7, 8, 9 kids.

If you are rich, fair enough, but if you can't manage to afford to pay for 2, why have 3, 4, 5, 6 etc.

Charley, what happens if you think you have a secure job, and can afford multiple kids, but then you are made redundant, or you have an accident and can't work any more? What then?

This is why we need a safety net.

Charley,

I think part of the problem with that is that then you're effectively punishing the kids - who are probably pretty disadvantaged anyway.

I am the sole wage earner in my family (DH is a SAHD) however my salary is high so we will lose the CB and TBH won't really miss it.

So I have no personal axe to grind with this policy as we would be caught whether they looked at individual or household incomes and losing CB will not cause us a problem.

However, I am deeply concerned about the fairness issues. It cannot be correct that a single earner household with someone just above the HRT threshold loses CB but a household with two earners just below that limit retain their CB. Again what about the SAHP's NI contributions, how will that be covered or will families have to pay a voluntary stamp on top of losing CB.

I live in London and I agree that £44K is not a big income if you have kids and a mortgage plus commuting costs.

It is going to be very interesting how they deal with who lives together as well. For employees who are not filling out self assessment tax returns given we have separate taxation of husband and wife I suppose there will be letters written by HMRC asking them who shares their home and bed.

In answer to the question what is the "alternative to scrapping CB for higher rate taxpayers"

My first solution is for the government to look at the people who evade or avoid paying their fair share of taxes namely the non doms, hedge fund managers and mega rich business people who somehow manage to live in this country most of the time but avoid paying their fair share of taxes. Get a few hundred of them to start paying what they really owe and they will probably have more than £1billon within a year. I would also advocate publishing how much tax everyone in the country pays aka scandinavia which will act to name and shame almost all of the mega rich in this country. As for them threatening to move to Switzerland or wherever, well bloody well let them they'll soon get bored and will cough up in order to return.

My second solution is this "Why not scrap CB altogether and replace this with free lunches at state schools for all children until aged 16,thus ensuring the child benefits directly ,creating jobs in the local area, encouraging healthy eating,cut down the obesity levels and ending the stigma of free school dinners), school lunches cost us £10 per week per child during term time.

Families who previously had free school meals can also apply for EMA (education maintenance allowance)from the time their child starts school until 18 if they continue in full time education. You could adjust it so children get more as they get older reflecting increased costs."

The government needs to ensure all sections of society contribute fairly to reducing the deficit otherwise his visions of a big society where everyone is in it together is just a big pipe dream.

I agree - at the moment, only the little people seem to be paying taxes, as Leona Helmsley would say. To any Government, the middle classes are like drivers - you can easily get revenue out of them by coming up with policy versions of the notorious speed camera and making them cough up until the pips squeak by changing the rules the whole time to catch them out. But the top 2%? They are immune, waterproof, and own the vast majority of the wealth in this country. Not a good situation.

Mumzy - like the Free School Meal thing - and would create lots of part-time, term-time jobs - always in short supply.

Agree with boffinmum....and £44,000 is not a big income if your family are in London given the cost of living there. If George Osborne wants the 40% taxpayers to 'share the pain' what does he think giving the proceeds from nearly half your working day to the treasury feels like day after day? Painful... always.

We are a single income family earning just above the high tax bracket (for which my DH slogs it out for 10 hours plus 2 hours travelling because london too expensive) and that measly £20 a week is the only thing we get from the gov. It pays for my son's actvities as we are too isolated to go pushchair walking. When that money goes we will def miss it.

I can only hope they will be voted out before it takes effect.

Tiop 1% of earners pay 25% of tax which is hugely unfair on them and I hope you lot are all very grateful because there's no law that says we have to keep subsidising the poor like that or even those on incomes just over the higher rate tax limit (£37401 plus single person allowance of £6475 - £43,876

news.bbc.co.uk/1/hi/8417205.stm

If the housewife went out to earn £6475 which she can do tax free and the husband earning £44,000 dropped his income by salary sacrifice to £42k then they solve their child benefit problem from 2013 when it comes in. I am sure plenty of households are doing these calculations now. It would also mean they would be much better off too.

This measure is great as it will get a lot of women back into paid work and ensure theb alance of power between men and women and freedom women gain when they earn their own money is enhanced. Camerson the feminist - nice to write that.

But Xenia that doesn't quite work, because then childcare would need to be paid for. At a cost of about. £6.5K pa a year for a couple of school aged children.